Here’s One Way To Help Solve the Unemployment Crisis

WHY YOU SHOULD CARE

OZY and JPMorgan Chase have partnered to bring you an inside look at how entrepreneurs and their good business are helping the communities around them. Enjoy the rest of our special series here.

If you just look at the figures, job security seems to be improving in America. Just three years ago, the country’s jobless rate was 6.7 percent, compared to today’s rate of 4.7 percent. But economists argue whether this number — which accounts only for those actively seeking work and leaves out everyone who has given up on their job search or just isn’t looking — paints the real picture. And in inner cities, joblessness is much worse, with the average unemployment rate across all distressed neighborhoods at a sky-high 12.9 percent, according to the Initiative for a Competitive Inner City (ICIC).

So why don’t the numbers add up? For starters, solving unemployment isn’t as simple as adding new jobs.

“You don’t need … to employ 1,000 people to solve unemployment, and you don’t need monstrous growth by all small businesses,” says Kim Zeuli, ICIC’s senior vice president. “What we really need is moderate growth, and it would create enough opportunity for the currently unemployed.”

What we really need is moderate growth, and it would create enough opportunity for the currently unemployed.

Kim Zeuli, senior vice president, ICIC

Two of the biggest — and most often overlooked — drivers of economic growth are affordable housing and the right training (job seekers need to be taught the right skills to fill the right jobs). These factors are what small businesses rely on, and, according to the ICIC, small businesses are the primary driver of job creation in metropolitan areas. In fact, a modest increase in the number of employees hired by existing small businesses — one to three employees per business — could create enough employment opportunities for all currently unemployed inner-city residents, the nonprofit explains.

So here’s a bright idea: Why don’t we do more. Why don’t we help small businesses grow by subsidizing the salaries they pay to new hires? As it happens, some corporations have a similar idea. Recognizing that small businesses are critical for economic growth, JPMorgan Chase has partnered with ICIC as part of its Small Business Forward initiative to help support women, minority and veteran-owned small businesses. JPMorgan Chase has also set aside $250 million over the next five years to provide training to individuals to get their skills up to speed, thereby closing the skills gap that adds to the unemployment numbers.

”[Jobseekers] all don’t need to be highly skilled,” Zeuli notes.

However, financial support alone isn’t enough to get all small businesses matched with the right employees and ready to flourish. Small business owners also need help with recruitment, because they usually don’t have their own human resource departments and are juggling so much, Zeuli explains. Emily Miethner, founder of FindSpark, a small, New York City-based business with five employees that helps companies of all sizes find talent, says smaller businesses often don’t have as much structured training as bigger firms. So for them it’s more important to find the ideal candidates who can “hit the ground running.” The best small business hires? Self-starters with a proactive work ethic and an entrepreneurial spirit, she says. When the match isn’t one that perfectly aligns, the results can be detrimental for small businesses.

Still, this concept could be a step in the right direction. Will it solve unemployment immediately? “No, it’s not a silver bullet,” Zeuli admits. “But it’s a provocative idea certainly worth exploring, because what we’re currently doing isn’t working.”